Default Risk Weatbechead Bakery recently issued 10-year bonds in order to raise capital to better compete with Dunkin Donuts. The yield on its bonds is 6.2%. S&P assigned these bonds a rating of B. The 10-year cumulative default probability for B rated corporate bonds is 46.50%. The recovery rate (what investors get upon default) is 40% of face value. Lastly, you know that 10-year US Government bonds have a yield of 2.0%. Calculate the following: 26) Expected return for the bond in a 1-year period (2 pts) 27) Bond risk premium in a 1-year period (2 pts) 28) Compensation for default in a 1-year period (2 pts) Default Risk Weatbechead Bakery recently issued 10-year bonds in order to raise capital to better compete with Dunkin Donuts. The yield on its bonds is 6.2%. S&P assigned these bonds a rating of B. The 10-year cumulative default probability for B rated corporate bonds is 46.50%. The recovery rate (what investors get upon default) is 40% of face value. Lastly, you know that 10-year US Government bonds have a yield of 2.0%. Calculate the following: 26) Expected return for the bond in a 1-year period (2 pts) 27) Bond risk premium in a 1-year period (2 pts) 28) Compensation for default in a 1-year period (2 pts)